1. Field
The present disclosure relates generally to electronic commerce and online auction systems, and more particularly, to a method and system for allowing a user or participant in an online auction to take pricing options during the auction and for incentiving holders of the options.
2. Description of the Related Art
Online Internet auctions are now a major component of Internet commerce. Companies such as eBay Inc. of San Jose, Calif., uBid Inc. of Chicago, Ill., and Yahoo! Inc. of Santa Clara, Calif. conduct billions of dollars worth of online auctions on an annual basis. Merchandise and services of all sorts are regularly bought and sold through these and other auction web sites.
Generally, a seller of goods or services registers with one of the aforementioned web sites to create a user account. The seller then creates a listing for the item the user desires to sell. Typically, the listing will include a description of the item and one or several pictures of the item. The seller will then set a minimum starting bid price and optionally a reserve bid price, i.e., a secret minimum price the seller is willing to accept for the item. Finally, the seller will set a time period for which the auction will run, e.g., 7 days. During the time period of the auction, potential buyers or bidders will place bids on the listed item. After the auction time period has expired, the highest bidder will be awarded the item and will purchase the item from the seller, preferably, through an e-commerce transactions employing several available methods including PayPal™.
One of the challenges of the online auction communities is to make sure that the merchandise sold to the highest bidder actually gets paid for by the highest bidder. In many cases involving hundreds of millions of dollars each year, the highest bidder in an online auction will default and not pay for or take delivery of the merchandise/services he has bid on. A default on a winning auction bid means that the seller of the merchandise will not receive the money that he expected for the merchandise, and in many cases, must re-auction the goods or services.